Labour leader Jeremy Corbyn addresses delegates and members at the party conference last year.
Photograph: Christopher Furlong/Getty Images

Labour membership is expected to fall below half a million for the first time since its peak under Jeremy Corbyn because about 40,000 people are in arrears.

The unusual number of lapsed payments was discussed at a meeting of Labour’s ruling national executive committee (NEC) on Tuesday, as the drop will hit Labour’s budget.

A source present at the meeting said the number of members who are up to date with their payments is now about 483,000, with about 40,000 having fallen behind.

The peak of party membership under Corbyn was 554,000 members as of last July, which had fallen to 528,000 by December.

However, senior party figures warned at the time that this lower figure might not reflect the scale of people leaving the party, as some might have simply cancelled their direct debits without informing the party formally that they wanted to leave.

The membership figure as of the general election on 6 May 2015 was 201,293.

Lots of new members joined up during the leadership contest in August-September 2015, many doing so in order to vote for Corbyn.

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Updated data was presented to the NEC on Tuesday, but it is hard to know if those failing to renew their membership are supporters of Corbyn who joined to vote in the leadership contest, or his opponents who do not like the direction the party is taking.

A Labour source said many of those who gave a reason for resigning their membership said it was because of Corbyn’s decision to whip his MPs in favour of voting for article 50.

At the NEC meeting, MP Ian Lavery, the party’s election coordinator, gave a presentation about the party’s local election campaign effort, saying the slogan would be: “Standing up for you.”

The party, he said, would be making five pledges:

To invest in Britain.

To offer better health and social care.

To create educational opportunities for all.

To create safer neighbourhoods.

And to provide affordable homes, including more new-build council housing.

Last month, Lord Watts, a former chair of the parliamentary Labour party, said he thought the falling membership was a sign of people losing faith in the party’s performance.

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“I think the tide is turning … I imagine people are losing heart because they can see the polls, they’re talking to their neighbours and people they work with, and are coming to the conclusion Labour is not doing well and, at this point, not convincing the public,” he said.

Labour’s membership is still way above that of the Conservative party, which had 149,000 members as of the last official data in 2013.

The Liberal Democrats have about 82,000 members and the Scottish National party has about 120,000 members.

A Labour spokesman said the party does not comment on membership figures.